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I'm trying to decide whether it would be better to use traditional or simplified characters for an iPhone game I'm making. If something is written in traditional, how many people will be able to read it? If something is written in simplified, how many people will be able to read it? From my research it seems most people can read simplified.

3 Answers
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More people can read simplified than traditional, by a significant margin. There are roughly 1.3 billion people mainland China where simplified has been the standard since the 50s and 60s. Taiwan and Hong Kong, the three places traditional is the standard, total about 32 million between them (23 million in the Taiwan/ROC, 7 million in Hong Kong, 2 million in Macau). There are a lot of people from mainland China and Chinese outside of countries where Chinese in the primary language who can also read traditional, but I have no clue on the numbers.

Most people can get by more or less when reading the other character set because there are a lot of very standard substitutions. It is however easier to read simplified if you only know traditional.

I strongly disagree with the last paragraph of this answer. It's common for 2 or more Traditional characters to have merged into only one Simplified character, so automatic conversions from Simplified to Traditional are usually full of errors. Traditional-to-Simplified is generally better, because there are only a handful of characters with multiple simplified forms for one traditional form, but still not 100% perfect.
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IronfrostJan 9 '13 at 7:00

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[...continued] The converter you linked to is particularly bad, because it doesn't take context into account at all. For example, 麵 (miàn: flour) and 面 (miàn: face) are separate characters in Traditional Chinese, but both written as 面 in Simplified. That converter always outputs 面, even if the character is part of a word like 面包 (miànbāo: bread) where the correct traditional form is 麵.
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IronfrostJan 9 '13 at 7:00

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[...continued] There are better converters like Google Translate or the one on Chinese Wikipedia that try to guess the right character based on context, but even they still often make mistakes. I wouldn't advise using them to translate a product you're charging money for.
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IronfrostJan 9 '13 at 7:02

@StumpyJoePete, I haven't had time to do research on alternative services. If you have a good link, I'd be happy to throw that up, otherwise I'll try to do that this weekend.
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juckeleJan 10 '13 at 16:07

Most Chinese can read the both. The reason is that only a small portion of Hanzi are different between traditional and simplified Chinese. (in other words, only a small portion is simplified from traditional version to simplified version.) Most Hanzi are the same.
In mainland Chinese, you still can see traditional hanzi everywhere like plaques, posters, chess, academic philological periodicals. In Taiwan or Hong Kong, people also use some simplified ones in handwriting.